Freehold Township 2027 Reassessment Report

Freehold Township’s 2026 Director’s Ratio was 100.79%, the second most accurate of any municipality with more than 6,500 properties in 2026. While the Director’s Ratio is a complex calculation, it expresses the typical relationship between assessments and sale prices in a given municipality. The sampling period contains sales that took place between January and June, which are then blended with the prior year’s ratio to stabilize shared levy impacts. Assessments are set during the pre-tax year based on sales from the prior two-year period.

Typically, real estate markets do not appreciate significantly year over year, so little emphasis was put on this topic in prior reassessments. However, recent market changes have been exceptional and volatile, so it is worth noting here to provide context to the statistics.

The General Coefficient of Deviation is widely held as the best indicator of proper tax distribution. It measures how tightly clustered individual assessment ratios are in relation to the average ratio. A lower COD means more accurate and fair tax distribution. The COD normalizes ratios to show accuracy within a municipality regardless of the Director’s Ratio in any given year. The more homogeneous the properties in a municipality are, the lower the COD should be. For example, a municipality composed mostly of townhouses would be expected to yield better assessment accuracy than one with a wide range of property types.

Monmouth and Somerset Counties show much lower CODs through annual reassessments than historical or statewide data. Since the implementation of annual reassessments in 2014, Monmouth County has seen (outside of COVID-19) a steady improvement in the General Coefficient of Deviation countywide, meaning assessments and resulting tax bills are becoming more accurate. The 2027 Monmouth County average COD was 10.63 (Freehold Township was 6.97).

Despite the complexity of the Township, Freehold’s COD has been more accurate than the norms in the rest of the state and county, meaning that the assessments and resulting tax distribution are fairer. The 2027 COD was 6.97, the second lowest of any municipality with more than 6,500 properties in 2027, and the third lowest COD county-wide this year. While a historical comparison is an important measurement, the COD must continue to be analyzed over time, as coefficients will inevitably be higher during years when the underlying market is more volatile or suffers from an imbalance of supply or demand.

The primary driver of a reassessment is recent “arms-length market transactions.” Statutorily, properties are assessed for what they would have sold for on October 1st of the pretax year. The 2027 valuation date is October 1st, 2026.

“Value for purposes of taxation has some measure of permanence which renders it secure against general temporary inflation or deflation.”Hackensack Water Co. v. Division of Tax Appeals, 2 N.J. 157, 163 (1949)

“True value must be fairly constant and must be gauged by conditions, not temporary and extraordinary, but by those which over a period of time will be regarded as measurably stable.”Berkeley Arms Apartment Corp. v. City of Hackensack, 6 N.J. Tax 260, 286 (Tax 1983)

These quotes are more important now than ever. While the local market has appreciated at significant rates, assessors must view the sales data in its totality while mass modeling assessments. More recent sales are given more credibility, but older sales remain a stabilizing factor with annual reassessments. A reassessment generally measures sale prices from the past two years, giving more credibility to the more recent transactions. The Monmouth County Tax Board has a standardized review process to measure new assessments against sale prices from the current and prior year.

VCS, or Value Control Sectors, help differentiate local markets and neighborhoods. Characteristics of an individual VCS may include zoning, lot size, home size, year built, builder, construction quality, style, and proximity to schools, highways, or landmarks. Just about any factor, tangible or intangible, might affect buyers and sellers in a specific sub-market.

The Township’s net valuation is expected to increase by 2.97% in 2027. About $316 million has been added to the Freehold Township ratable base.

Taxes are driven not by whether an assessment goes up, but by how it changes relative to the average. Residential assessments rose 2.48% overall, and 80% of the Township’s 11,666 residential line items are within 5% of their 2026 assessment; about one in five saw a decrease. With the 2027 rate expected to stay roughly flat, a home that rose less than the 2.48% average should generally see a smaller share of the levy, and one that rose more a larger share.